How much does the tax man take when I die in New Jersey?
Every year the amount of in an estate has been increasing that passes tax-free. Under the new federal tax law doubled what can be passed tax-free through 2025. Currently, an individual can pass $11.18 million free from federal taxes. Most families do not have to worry about this number, however, New Jersey Estates have different categories of beneficiaries that are taxed at different rates.
New Jersey Inheritance Tax Rates by Class
What is Estate Planning in New Jersey?
Estate planning is about more than just about estate taxation. The goal of estate planning is about protecting your loved ones and the assets you leave them from more than just taxes.
For instance, if your son or daughter is not good making at making financial decisions, or you think they are too young to make prudent decisions or are afraid that their spouse will take his or her money you may want to leave your assets in a trust with someone else other than your children as a trustee. That trustee will distribute money to your children for his or her needs. The money and property you leave your children will not be wasted. The money and property in the trust would also be protected from a greedy spouse if your children marry the wrong person.
Leaving the money in a trust that your children cannot take also protects the assets from lawsuits. If your child accidentally runs someone over, the money in the trust cannot be touched. If your child is a doctor and is sued for malpractice the trust cannot be dragged into the lawsuit for payment as long as your children are not the trustee of their own trust.
Special Needs Trusts can also provide for a child with special needs that may also need to receive public assistance.
If you are concerned about privacy, a trust also keeps your assets out of public view. See this post about trusts for privacy.
Everyone thinks estate tax planning is only relevant for wealthy families and even moderately well-off families. However, estate planning is more than just avoiding taxes. New Jersey Estate Planning is about providing for your loved ones and helping them once you have passed.